The Passenger Rail Agency of SA (Prasa) has brought out the begging bowl, telling a parliamentary committee that it needs at least R3bn in state funding over the next three years to protect its vulnerable rail network.
“Prasa security needs the funding support of the department of transport, as well as National Treasury, to operationally fund the security plans,” Prasa acting CEO David Mphelo told MPs on Wednesday.
“This would allow the take-back of Prasa infrastructure and the necessary resources deployed with an oversight of command and control,” he said.
Prasa, battling to stay afloat with expenses that far outstrip revenue, has for years been weighed down by vandalism and theft of its critical infrastructure, which threaten to derail economic recovery since rail is crucial for productivity and growth. It is also an affordable and preferred mode of transport for millions of working-class South Africans.
Any request for additional funding by Prasa will test the National Treasury’s determination to wean parastatals from the fiscus and make them commercially viable.
Prasa could yet avoid putting the Treasury in an awkward position, with Mphelo suggesting some of the money to boost security could be drawn from the budget meant to modernise infrastructure and by raising train fares, which have not been reviewed in seven years.
“We’ve got enough capital for modernisation and recovery, but the operational part is impacted. All we are asking for is permission to transfer the money in capital funding into operational funding, and that will help us to alleviate a lot of operational issues we are facing,” he said.
Prasa had an operational subsidy of about R9bn in 2021, up from just more than R8bn the year before. The capital subsidy dropped from about R4bn in 2020 to R3bn in 2021.
Mphelo was part of a Prasa delegation briefing parliament’s select committee on transport, public service & administration, public works and infrastructure on its drive to modernise and rehabilitate the passenger rail network. He said boosting the physical deployment of security personnel was needed.
“Once Prasa has fully deployed the personnel needed to stabilise the infrastructure, the divisions can get on with their work to fully restore services ... protection of the assets in the short to long term is needed to enable Prasa to provide consistently reliable train services,” Mphelo said.
Rehabilitating the network without investing in security would be pointless, he said. “We are dealing with syndicates ... we need boots on the ground and technology.”
Prasa is one of the many state-owned entities suffering due to the theft of critical infrastructure, including railway lines, electricity pylons and road barriers. The theft is largely being driven by surging global demand for scrap metal, in part due to tight supplies and low inventories pushing prices to record highs.
The rail agency is struggling to tackle the crisis, partly because it lacks the funds as its losses grow. It recorded an almost R2bn loss in the financial year ending March 2021.
Covid-19 restricted travel, while vandalism of Prasa infrastructure further whacked its finances.
It reported a profit of about R2.1bn in 2019/2020, before Covid-19 struck. Group revenue was R13.6bn, down from R16.2bn the year before.
Expenditure stood at R15.5bn, up from R14.3bn in 2020. This is likely to have been worsened by 3,000 imaginary workers — nearly 20% of the workforce — who were illegally drawing salaries until as recently as December, when Prasa moved to stop the disbursements.
DA MP Tim Brauteseth encouraged Prasa to use drone technology to monitor its network and also to decentralise operations to give provinces and municipalities a greater say in rail operations.
The DA-led City of Cape Town has been pushing to take control of the train system in the city to avert its collapse.
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